ShanghaiTech SEM Working Paper No. 2018-012
Sumit Agarwal
National University of Singapore - Department of Finance and Department of Real Estate
Long Wang
ShanghaiTech University - School of Entrepreneurship and Management
Yang Yang
The Chinese University of Hong Kong - School of Hotel and Tourism Management, CUHK Business School
Abstract
This paper studies how hotels and their guests respond to exogenous detrimental environmental shocks. We employ a unique dataset of online reviews covering all the hotels in Singapore and Hong Kong from three prominent hotel-booking platforms. The results show that the review scores of hotels in Singapore dropped sharply by up to 0.35 points during the haze periods and reverted immediately to and exceeded eventually their previous level after the haze shock. We discuss possible explanations for the observed effects, including hotels' service quality, managers' efforts and guests' mood. Negative environmental shocks motivate managers to reflect on their operating efficiency, and active communication on online travel reviews prompts reflection and service improvements. At the same time, large-scale improvement in service quality is not persistent and increases at a decreasing rate during subsequent environmental shocks. Our findings shed light on the importance of realizing deficiencies on management and operation in the presence of negative shocks and contribute to a growing literature on environment, interruption, and management at the micro level.
Keywords: Air pollution, Productivity, Performance, Tourism, Information and Learning
Date Written: June 20th, 2018
Available at SSRN: https://ssrn.com/abstract=3218812
Download PDF Version here:
【No. 2018-012】SSRN-Blessing in Disguise-Environmental Shocks and Performance Enhancement.pdf
